Race to increase prices
From the end of March 2021, the price of inorganic fertilizers of all kinds has increased. Domestic fertilizer prices also increased with the increase of world fertilizers, especially fertilizers that could not be produced domestically.
However, many domestic fertilizers can be produced with sufficient output to meet demand, or like DAP, which can only meet 60-70% if running at full capacity but still actively exporting and racing to increase prices with many reasons such as "still ensuring the domestic selling price is lower than the world price", "increasing input material prices", "if the price is not increased, cheap domestic fertilizers can be smuggled abroad"...
In fact, it must be confirmed that the price increase is due to supply and demand factors. But perhaps it is also necessary to frankly consider the state management responsibilities of the Ministry of Agriculture and Rural Development, especially the Ministry of Industry and Trade, because it has not properly assessed the demand and actual inventory in the country even though there are many businesses doing business in the country. Early warning fertilizers. The rigid maintenance of defensive taxes on DAP and MAP fertilizers made the price of imported fertilizers higher by more than 1 million VND/ton when put into circulation.
In addition, the lack of decisiveness in deciding to suspend exports or impose export taxes on urea and DAP also contributed to the sharp increase in fertilizer prices. The strong growth in export volume of DAP and urea in the first 6 months of this year must be considered a sad achievement, because export prices are often lower than import prices of the same type in the same period.
Invisible, the "privileges" on protection policies and the State's preferences with the desire to build fertilizer factories to proactively source cheap and stable fertilizers for agricultural production. The country seems to have fallen short of expectations. In effect, exports are directly transferring some of the State's support abroad instead of going to domestic farmers.
Looking from the fact that the price increase was chaotic as it was out of control in the past time, it is necessary to review the rigid operating policies of the responsible management agencies. If there are no drastic and effective solutions such as controlling prices (urea is still a commodity controlled by the State), suspending or imposing high taxes on exports for DAP and urea, suspending the imposition of tax defense with DAP and MAP... the risk of many farmers leaving their fields in the next crop is very great, when the price of agricultural products is still very volatile.
I think it is necessary to inspect the data of production, exports, sales and inventory from time to time to know the actual reasons contributing to the increase in domestic fertilizer prices of manufacturers. DAP and urea production now!
Source: Tuoitre.vn - Vu Duy Hai (General Director of Vinacam Group)